Open College Blog

Bitcoin in a nutshell

This is a brief but simple explanation for those who have heard about Bitcoin but don’t know what it actually is!

Simply put Bitcoin is a universal or global and digital money currency system similar to Stirling or the Dollar.

Bitcoin is a tool that allows users to send and receive money through the internet safely without the risk of exchanging other currencies with complete strangers.

Bitcoin can be received and exchanged without revealing a sender’s real identity and yet still remain safe.

Bitcoin’s security revolves around the mathematical field of cryptography.

How does Bitcoin work?

Bitcoin is held within a users wallet and an actual transaction between say two people is a transfer of value that becomes included in the block chain.

Within the Bitcoin wallet is kept a secret piece of data which is often called a seed or private key to sign transactions which produces a mathematical proof that they have originated from the owner of that particular wallet.

Bitcoin was originally developed in 2008 as a system for Internet payments to be made which does not require a controlling or trusted central banking system or regulating authority and is now growing like wildfire.

Bitcoin has now grown and developed into an amazing technology with a vast community of users all over the world without any government influence, control or specifically banking intervention where any authorities cannot intervene, control or freeze money like they can through mainstream currency.

What makes Bitcoin so special is that it utilises a consensus in a huge peer-to-peer Internet network to verify all transactions which results in lower transaction fees which are non-reversible.

There is simplicity in complexity and complexity in simplicity. Bitcoin is really simple once understood.

Some willing users called miners put their operating systems to work by verifying transactions in the peer-to-peer network which results in these users being rewarded with new Bitcoin’s which appears to be a balanced and proportional offering equal to the amount of input they donated into the peer-to-peer network for their efforts.

There is no actual control over Bitcoin has such, there is no central regulating banking authority or government control (which they are not happy with), there is no owner in charge of Bitcoin.

As stated, various computer users or computer programmers who have donated their time in developing the open source software can make changes subject to the approval of the main original developer.

It is very difficult for anyone external to manipulate Bitcoin.

So where do you start with Bitcoin?

Obtain a few Bitcoin’s and be prepared to lose them and experiment and explore in order to learn more.

The first thing is you need to learn how to set up your own Bitcoin wallet and then how to obtain more Bitcoin’s.

To learn more about Bitcoin and its benefits please see our free training Bitcoin course located on this website for details.

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